KCB Group’s half-year net profit doubles to Sh15.3b
KCB Group’s after tax profit more than doubled in the first half of 2021 to Sh15.3 billion up from Sh7.6 billion reported same time last year.
It is the second lender to double its half-year profit this year despite the ongoing Covid-19 pandemic after Equity Group net profit jumped 98 per cent to Sh17.9 billion up from Sh9.1 billion last year.
KCB Group attributed the 102 per cent increase in profit to improved economic activity, robust revenues and lower provision charge.
“We saw a strong first half of the year for the business with improved economic activity.
The resilient and diversified nature of our business has helped us navigate the unfolding impact of the Covid-19 pandemic,” KCB Group chief executive, Joshua Oigara said yesterday.
“The business is well-positioned to catalyse the ongoing economic recovery as well as benefit from this resurgence,” he added during announcement of the half-year financial results at a Nairobi hotel.
The results indicate that the total income increased from 13.7 per cent to Sh51.2 billion with net interest income rising to Sh36.6 billion from Sh31.1 billion last year, a 17.7 per cent increase.
The increase in revenue was on the back of higher interest earning assets and effective management of cost of funding during the period, according to the group.
Customer deposits rose by four per cent to Sh786.03 billion from Sh758 billion mainly due to current and savings accounts, while loans given out grew by nine per cent to Sh606.9 billion on account of corporate term loans and retail check offs during the period.
Non-performing loans (NPLs), however, increased by Sh11.8 billion to Sh95.7 billion from Sh83.9 billion same time last year.
This saw the ratio of NPLs increase to 14.3 per cent up from 13.7 per cent same time in 2020.
“Most of this increase occurred during the second half of last year, highlighting the strain on customers and their business because of the healthcare crisis,” KCB Group explained in a statement.
Despite this, the cost of risk fell to 2.2 per cent from four per cent.
Operating costs rose by seven per cent due to an increase in staff costs as the group enforced cost management initiatives to ring-fence the business from the impact the pandemic.
During the period, KCB crossed the Sh1 trillion milestone with its balance sheet Sh1.02 trillion up from Sh953 billion, a seven per cent jump.
Shareholders’ equity grew 16 per cent from Sh132 billion to Sh153 billion on improved profit for the period.
The group maintained a solid capital position, with all key ratios well above the minimum regulatory requirement.
Covid-19 healthcare crisis
KCB said it is well on track to achieving its three-year Beyond Banking strategy despite the impact of the Covid-19 healthcare crisis.
KCB Group chairman, Andrew Kairu said the roll out of a vaccine globally has brought hope that the crisis will soon be under control.
“Looking forward, we believe we shall see the operating environment, and consequently our customer businesses continue to recover,” he said.
In line with its strategy to expand its presence in the region, KCB Group is in the final stages of acquiring a majority stake in Banque Populaire du Rwanda and the African Banking Corporation Tanzania Ltd.